FIRE Calculator Assumptions & Methodology

Overview

Our Ultimate FIRE Calculator estimates your financial independence journey using month-by-month projections for income, expenses, investments, debts, and major life goals like college and retirement. Below are the key assumptions and sources used in our calculations.

Income & Growth

• Salary and RSU growth rates are user-adjustable and compound annually.
• 401(k) and IRA contributions are capped according to current IRS limits.
• Employer match is calculated based on user input.

Expenses

• Quick estimate or detailed breakdown available for monthly expenses.
• Inflation is applied to all expense categories at the rate you select.

Investments

• Investment growth rate is user-selected and compounds monthly.
• Asset allocation is not modeled; all accounts grow at the same rate.

Retirement & College Goals

• Retirement goal is based on your chosen annual spending and withdrawal rate.
• College costs use national averages and adjust for inflation; financial aid is estimated based on household income.

Sources

• College cost data: National Center for Education Statistics (NCES)
• Retirement withdrawal rates: Trinity Study, Bengen (1994)
• IRS contribution limits: irs.gov

Learn More

For a deeper dive, see our College Savings Series and FIRE Methodology Blog.